National eyes housing aid

The Government will try to dig itself out of the Dirty
Politics mire when it unveils a housing policy today
expected to target Kiwis struggling to enter the property
market.

Housing Minister Nick Smith was keeping quiet about details
of the policy, but it is expected to be a push for more
affordable homes through extra building.

But there are warnings it could be too little, too late, as a
new report reveals the housing shortage is worse than
previously thought.

The report, by right-wing thinktank, the New Zealand
Initiative, and obtained by the Herald on Sunday, claims the
country's ageing population will put the squeeze on the
housing crisis, and the Government has not been taking this
into account.

"This is the greatest crisis facing New Zealand and unless we
ramp up supply well beyond current levels, home ownership
could be out of reach of most families within 20 years," said
director Oliver Hartwich.

New Zealand had an average household size of about 2.6, one
of the highest in the OECD, he said.

This was likely to reduce to around two people per household,
placing huge strain on the housing market.

"We all say that we've got a massive housing shortfall, we
all seem to believe that it's got a lot to do with
immigration, but nobody talks about the giant elephant in the
room which is changing household sizes. And I think in the
future this will be a massive problem."

Hartwich warned that Auckland house prices could reach the
stratospheric levels of Sydney if at least 113,800 more
houses weren't built within 20 years.

In April, average sale prices for houses in Auckland reached
$700,000. According to one recent study, the median Sydney
house price was $900,000.

Labour leader David Cunliffe said his party planned to block
non-residents from buying property, and a capital gains tax
to limit "rollercoaster" house prices.

Housing Minister Nick Smith said Labour's policy was designed
to "scratch an itch, whereas I'm focused on addressing the
long-term change that's required to improve home ownership
and housing affordability."

Smith said the findings of the Productivity Commission would
form the basis of his new housing policy. Its report,
released in April 2012, said new land should be immediately
released for housing development in "high-demand areas" such
as Auckland and Christchurch.

The minister said the Government would continue addressing
problems of land supply, council development charges and even
the cost of construction materials.